The Federal Reserve is widely expected to keep its benchmark interest rate unchanged at 3.75%–4.00% when its two-day policy meeting concludes on Wednesday, October 28. Officials are weighing persistent inflation against a softening labor market, with the U.S. midterm elections less than a week away. Ahead of the 2 p.m. ET announcement, Polymarket traders estimate a 94.9% probability of a rate hold.
While Wednesday’s decision is largely anticipated, the outlook for December remains uncertain. Prediction markets indicate a 79% chance of another rate increase next month, making Chair Kevin Warsh’s press conference at 2:30 p.m. a key event for cryptocurrency traders.
Bitcoin is trading at approximately $81,430, marking a 1.9% gain over the past 24 hours.
Polymarket’s October rate-decision contract has attracted $86 million in wagers. The most likely scenario for the next three meetings, with a 59% probability, involves rates remaining unchanged in October, rising in December, and staying steady again in January. The December probability incorporates markets pricing in both 25-basis-point and 50-basis-point increases.
The bond market is reflecting a similar outlook. The two-year U.S. Treasury yield reached 4.68% on Monday, sitting 68 basis points above the upper boundary of the Fed’s target range. That compares with 4.17% in late August. The increase suggests investors are preparing for further monetary tightening rather than expecting rates to remain unchanged for an extended period.
What Are Traders Expecting From Warsh?
Investors are looking for a hawkish hold, meaning the Fed keeps rates steady while leaving the possibility of additional increases open.
Recent economic indicators offer conflicting signals. Consumer inflation accelerated to 3.7% year over year in September, compared with 3.4% in August, while Brent crude remained close to $111 per barrel. Meanwhile, U.S. employers added just 29,000 jobs in September, and the unemployment rate rose to 4.2%.
The Fed raised rates by 25 basis points on September 16 in a unanimous 12–0 decision. Its statement emphasized that inflation remained elevated and reaffirmed the committee’s commitment to price stability. Warsh has generally avoided providing firm forward guidance since becoming chair, maintaining that he does not “prejudge meetings.”
The number of dissenting votes will be another important signal. Cleveland Fed President Beth Hammack, Dallas Fed President Lorie Logan, and Minneapolis Fed President Neel Kashkari supported a rate increase in July, while the remaining policymakers favored holding rates steady.
Polymarket assigns a 33.5% probability to two dissenting votes, making that the most likely outcome. Three dissents carry a 28% probability, while a unanimous decision is priced at 23%. Matt Weller of FOREX.com describes two or more dissents as a “true hawkish hold.” If all policymakers support the decision, expectations for a December hike could weaken.
The timing also introduces a political consideration. With the midterm elections approaching, the Fed may prefer to avoid creating additional uncertainty. Before the meeting, SMBC chief economist Joseph LaVorgna said the central bank would not want to provoke the White House just six days before the election.
The leading scenario is therefore an unchanged rate accompanied by two hawkish dissents, continued warnings about inflation, and a press conference in which Warsh keeps a December increase under consideration without committing to it. Such an outcome could leave the probability of a December hike near its current 73%–79% range.
The main surprise risk lies in a more dovish outcome. A unanimous decision, or comments from Warsh suggesting that 10-year Treasury yields near 5% are already sufficiently restrictive, could prompt traders to lower their expectations for another rate increase.
What Could the Fed Meeting Mean for Crypto?
Bitcoin’s reaction to previous Fed decisions in 2026 suggests that the central bank’s messaging may have a greater influence on prices than the decision itself.
BTC declined within 24 hours of three of the five rate holds this year, with the average performance across all five meetings showing a 2.6% loss. The largest declines followed the January and June meetings, when Bitcoin fell 6.2% and 5.1%, respectively.
The September 16 rate hike produced a different outcome. Bitcoin gained 1.1% in the following 24 hours and climbed 11.3% over the next week as uncertainty surrounding the decision subsided.
Options markets currently indicate relatively moderate expectations for volatility. Deribit’s DVOL index, which tracks the 30-day implied volatility of Bitcoin options, stood at 37.3 on Wednesday and has remained within a range of roughly 37–39 over the past two weeks.
This suggests that the market could still experience a significant move if Warsh delivers an unexpected message.
A stronger indication of a December rate hike could lift Treasury yields and the U.S. dollar, potentially putting downward pressure on Bitcoin. A more dovish tone could ease those pressures and provide support for BTC and other cryptocurrencies.
Investors also face several upcoming catalysts. September’s personal consumption expenditures (PCE) inflation report and third-quarter GDP figures are due Thursday. Deribit’s monthly options contracts expire on Friday, followed by the U.S. midterm elections on November 3.
Bitcoin Price Analysis: Can BTC Recover $83,624 After the Fed Decision?
Bitcoin remains above its major moving averages but has yet to reclaim its October opening price. The Fed’s guidance could help determine whether BTC resumes its recovery or faces another decline.
Bitcoin is trading near $81,430 on Binance, above its 50-day exponential moving average (EMA) at $80,829 and its 200-day EMA at $76,442. These averages could act as support if the market comes under renewed selling pressure.
Resistance: $83,624, Bitcoin’s opening price for October. A sustained close above this level would return BTC’s monthly performance to positive territory.
Support: $79,221, the October 24 low. This level has held through three separate declines during the week, making it a key area for buyers to defend.
A dovish message from Warsh could help Bitcoin challenge the $83,624 resistance level. However, if the Fed signals a stronger likelihood of further tightening, BTC could fall below its 50-day EMA and retest support around $79,221.
